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2021 (12) TMI 557 - AT - Income TaxAdditions towards excess share premium u/s.56(2)(viib) - issue of shares over and above fair market value of such shares - share price determined by the assessee by adopting discounted cash flow method - HELD THAT:- If at all, the Assessing Officer is not satisfied with price determined by the assessee in any method, then he can verify methodology followed by the assessee for arriving at share price, but he cannot change different method altogether without any valid reasons. In this case, although the assessee has followed discounted free cash flow method, but the AO has changed to net asset method contrary to position of law. At the same time, although, the assessee claims that it has justified issue of shares at ₹ 430/- per equity share, but on perusal of details filed by the assessee before the learned CIT(A), we find that learned CIT(A) has deleted additions made by the Assessing Officer by following his predecessor CIT(A) order for assessment year 2014-15, where the assessee has issued share at premium of ₹ 90/- per equity share.Since there is abnormal increase in premium charged by the assessee when compared to previous assessment year, we are of the considered view that the learned CIT(A) has completely erred by following his predecessor CIT(A) order, without examining share price arrived at by the assessee at ₹ 430/- per equity share. The issue needs to go back to the file of the Assessing Officer to verify share price determined by the assessee by adopting discounted cash flow method. Hence, we set aside the appeal to file of the Assessing Officer and direct him to reconsider the issue de-novo in accordance with law - Appeal filed by the Revenue is treated as allowed for statistical purposes.
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